After sitting on the sidelines for two years watching home prices plummet, Rina Poke bought her ninth investment property in Australia’s Gold Coast for A$121,000 ($110,388), beating another buyer after a frantic round of bidding.
“This is definitely the time to buy,” Poke, a 44-year-old sales manager at World Gym in the Gold Coast suburb of Ashmore, said after the auction on Aug. 8 at which 16 properties were offered. “Interest rates are at an all-time low, it’s the bottom of the market and prices are on their way up.”
Buyers are finding bargains along Gold Coast’s 43-mile, high-rise-dominated resort strip, where home values have plunged as much as 50 percent in some parts since 2010 and the median price is a third below Sydney’s. Prices in the area known for its surfing beaches rose 0.8 percent in the 12 months through June, compared with 3.8 percent across Australia’s biggest cities, according to researcher RP Data.
“This has been a property crash in its truest sense, but we’ve been seeing some signals that the market is finally bottoming out,” said Louis Christopher, managing director of Sydney-based data firm SQM Research Pty. “But it’s early days.”
The Reserve Bank of Australia’s 2.25 percentage points of interest rate cuts since November 2011 pushed variable home-loan rates to the lowest since September 2009. The record-low 2.5 percent benchmark rate contributed to a 7 percent jump in home prices in the biggest cities in August since a May 2012 bottom, according to Brisbane-based RP Data.
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